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Question 1Marketing principles and customer behaviour
Which element of the marketing mix is concerned with the channels and locations through which a product reaches customers?
- Product
- Place Correct answer.
- Promotion
- Price
Explanation
Place, or distribution, covers the routes and intermediaries used to make a product available to buyers at the right time and location. It includes decisions about retail outlets, wholesalers and online channels. The other three elements address the offer itself, its cost to the buyer and communication with the market.
Question 2Marketing principles and customer behaviour
A business segments its market by dividing customers according to age, income and occupation. Which type of segmentation is this?
- Geographic
- Demographic Correct answer.
- Behavioural
- Psychographic
Explanation
Demographic segmentation groups buyers using measurable population characteristics such as age, gender, income and occupation. These variables are relatively easy to collect and link to purchasing patterns. Geographic, psychographic and behavioural bases use location, lifestyle and usage respectively.
Question 3Marketing principles and customer behaviour
In Maslow's hierarchy, which level of need sits directly above safety needs?
- Esteem needs
- Physiological needs
- Social needs Correct answer.
- Self-actualisation
Explanation
Maslow's hierarchy moves from physiological needs to safety, then to belonging and love, which are the social needs. Esteem and self-actualisation come at higher levels once belonging is addressed. Marketers often appeal to social needs through products that signal group membership.
Question 4Marketing principles and customer behaviour
Which term describes the process by which buyers interpret and make sense of marketing stimuli they encounter?
- Perception Correct answer.
- Learning
- Motive
- Attitude
Explanation
Perception is the process of selecting, organising and interpreting sensory information into a meaningful picture of the world. Because interpretation is personal, the same advertising message can be understood differently by different consumers. Learning and attitudes are related but distinct psychological concepts.
Question 5Marketing principles and customer behaviour
A firm sells its products through a single exclusive retailer in each region. Which distribution strategy is being used?
- Exclusive distribution Correct answer.
- Intensive distribution
- Selective distribution
- Direct distribution
Explanation
Exclusive distribution limits sales to one carefully chosen intermediary per territory, often to protect brand prestige and encourage retailer commitment. Selective distribution uses a limited number of outlets, while intensive distribution aims for maximum coverage. Direct distribution bypasses intermediaries altogether.
Question 6Marketing principles and customer behaviour
Which of the following is an example of a fast-moving consumer good?
- A business consultancy contract
- A fitted kitchen
- A breakfast cereal Correct answer.
- A family car
Explanation
Fast-moving consumer goods are low-cost, frequently purchased items such as groceries that are consumed quickly. Cereal fits this pattern because it is bought often with little deliberation. Cars, kitchens and consultancy contracts are high-involvement, infrequent or service-based purchases.
Question 7Marketing principles and customer behaviour
What is the main purpose of market research in the marketing planning process?
- To guarantee that a new product will succeed
- To reduce uncertainty by providing information about customers and markets Correct answer.
- To set the final price of every product
- To replace the need for segmentation
Explanation
Market research supplies systematic information that reduces the uncertainty surrounding marketing decisions. It informs choices about customers, competitors and the marketing mix but cannot guarantee outcomes. It supports segmentation and pricing rather than substituting for them.
Question 8Marketing principles and customer behaviour
Which concept holds that customers will favour products offering the best quality, performance and features?
- Production concept
- Product concept Correct answer.
- Selling concept
- Societal marketing concept
Explanation
The product concept assumes buyers value superior quality and features, so firms concentrate on improving the product. It can lead to marketing myopia if improvements ignore actual customer needs. The production and selling concepts focus instead on efficiency and aggressive promotion.
Question 9Marketing principles and customer behaviour
A shopper buys an unfamiliar brand of coffee simply because it is displayed next to the till at a low price. Which type of buying behaviour does this best illustrate?
- Extensive problem solving
- Habitual buying behaviour
- Variety-seeking buying behaviour
- Impulse buying Correct answer.
Explanation
Impulse buying is an unplanned purchase triggered by the immediate situation, such as a prominent display or low price. The buyer had no prior intention to buy the item. It differs from habitual and extensive decision-making because little evaluation occurs before purchase.
Question 10Marketing principles and customer behaviour
A company introduces a lower-priced version of its flagship product to attract price-sensitive customers. Which element of the marketing mix is being adjusted?
- Price Correct answer.
- Promotion
- Product
- Place
Explanation
Introducing a lower-priced variant is primarily a pricing decision aimed at a price-sensitive segment. Price includes list price, discounts and the perceived value exchanged. Although the offer changes slightly, the defining adjustment described is the price level.
Question 11Marketing principles and customer behaviour
A firm groups its customers by whether they are heavy, medium or light users of its service. Which segmentation base is being applied?
- Usage-rate segmentation Correct answer.
- Geographic segmentation
- Demographic segmentation
- Benefit segmentation
Explanation
Usage-rate segmentation divides a market according to how frequently or heavily customers use a product. Heavy users often receive disproportionate marketing attention because they account for a large share of volume. Benefit segmentation instead groups buyers by the advantages they seek.
Question 12Marketing principles and customer behaviour
A consumer seeks information from friends and reviews before choosing a laptop, then evaluates several brands against criteria. Which stage of the buyer decision process does this describe?
- Need recognition
- Information search and evaluation of alternatives Correct answer.
- Post-purchase behaviour
- Purchase decision
Explanation
The buyer decision process begins with need recognition, followed by information search and evaluation of alternatives. Seeking reviews and comparing brands against criteria belongs to these middle stages. Post-purchase behaviour occurs only after the purchase has been made.
Question 13Marketing principles and customer behaviour
A retailer positions itself as the cheapest supermarket in its region. Which positioning approach is it using?
- Price positioning Correct answer.
- Competitor positioning
- User positioning
- Attribute positioning
Explanation
Price positioning builds a distinctive place in the customer's mind based on cost advantage and value for money. Claiming to be the cheapest is a direct price-based claim. Attribute and user positioning rely on product features or the type of customer instead.
Question 14Marketing principles and customer behaviour
After buying an expensive camera, a customer notices reassuring reviews and avoids articles criticising the model. What is this behaviour called?
- Halo effect
- Reference group influence
- Selective distortion
- Cognitive dissonance reduction Correct answer.
Explanation
Cognitive dissonance is the discomfort felt after a difficult purchase, and buyers reduce it by seeking confirming information and avoiding negative information. This post-purchase reassurance is common with expensive, high-involvement goods. Selective distortion instead concerns misinterpreting incoming messages.
Question 15Marketing principles and customer behaviour
Which statement best distinguishes a market segment from a target market?
- A segment is chosen only after a target market has been served
- A segment is always larger than a target market
- A segment is a group with shared characteristics, while a target market is the segment a firm decides to serve Correct answer.
- A target market must include all potential buyers of a product
Explanation
Segmentation divides a market into groups with shared needs or characteristics, whereas targeting is the decision about which of those groups to serve. A target market is therefore a selected subset of the segments identified. Targeting follows segmentation in the planning sequence.
Question 16Marketing principles and customer behaviour
A brand of running shoes sponsors a major marathon and uses the event to reach committed runners. Which promotion tool is being used?
- Personal selling
- Sponsorship Correct answer.
- Sales promotion
- Public relations
Explanation
Sponsorship involves providing financial or material support to an event or organisation in return for brand exposure and association. Linking the brand to a marathon builds credibility with committed runners. Sales promotion instead offers short-term incentives such as discounts.
Question 17Marketing principles and customer behaviour
A company sells directly to consumers through its own website, bypassing retailers. Which channel decision has it made?
- A franchise channel
- A two-level channel
- A zero-level channel Correct answer.
- An intensive channel
Explanation
A zero-level or direct channel has no intermediary between producer and consumer, as with direct online selling. Two-level channels involve two intermediaries such as a wholesaler and retailer. Channel length refers to the number of levels, not the number of outlets.
Question 18Marketing principles and customer behaviour
A marketer decides to focus on a single small segment with distinctive needs rather than competing across the whole market. Which targeting strategy is this?
- Mass marketing
- Concentrated targeting Correct answer.
- Undifferentiated targeting
- Differentiated targeting
Explanation
Concentrated, or niche, targeting commits the firm to one narrowly defined segment, often to build deep expertise and loyalty. Differentiated targeting serves several segments with separate offers. Undifferentiated and mass marketing ignore segment differences entirely.
Question 19Marketing principles and customer behaviour
Why might a firm use perceptual mapping in marketing planning?
- To visualise how consumers perceive competing brands on key attributes Correct answer.
- To calculate the exact production cost of a new item
- To determine the legal requirements for advertising
- To forecast short-term cash flow
Explanation
Perceptual mapping plots brands according to customer perceptions on chosen attributes, revealing gaps and crowded areas in the market. It helps identify positioning opportunities relative to competitors. It does not calculate costs, legal rules or cash flow.
Question 20Marketing principles and customer behaviour
A customer buys the same toothpaste brand repeatedly with little thought. Which type of buying decision is this?
- Habitual buying behaviour Correct answer.
- Complex buying behaviour
- Dissonance-reducing buying behaviour
- Variety-seeking buying behaviour
Explanation
Habitual buying occurs in low-involvement categories where the consumer repeats a familiar brand without extensive search. Toothpaste is typically bought this way once a brand becomes routine. Complex and dissonance-reducing behaviour involve much higher involvement.
Question 21Marketing principles and customer behaviour
A firm's marketing orientation shifts from product-focused to customer-focused. Which outcome is most consistent with this shift?
- Production efficiency becomes the only priority
- Offers are designed around identified customer needs Correct answer.
- Customers are treated as a single undifferentiated group
- Sales pressure replaces market research
Explanation
A customer-focused marketing orientation starts by identifying customer needs and then designs the offer to satisfy them. This typically involves research, segmentation and tailored value propositions. It contrasts with production or selling orientations that prioritise efficiency or aggressive promotion.
Question 22Marketing principles and customer behaviour
A luxury handbag maker deliberately keeps output limited and prices high to preserve exclusivity. Which pricing approach does this reflect?
- Price skimming Correct answer.
- Loss-leader pricing
- Psychological pricing
- Penetration pricing
Explanation
Price skimming sets a high initial price to capture value from buyers who prize exclusivity and are less price-sensitive. Luxury goods often sustain this through limited supply. Penetration pricing instead sets low prices to build share quickly.
Question 23Marketing principles and customer behaviour
A supermarket finds that a small proportion of customers account for most of its sales. How should this finding influence targeting?
- The firm should ignore heavy users as they are already loyal
- The firm should withdraw from the market
- All customers should receive identical treatment because sales are evenly spread
- Marketing effort should be concentrated on retaining and growing heavy users Correct answer.
Explanation
When a small group of heavy users generates most sales, the firm benefits from concentrating retention and development effort on them. This reflects the principle that usage rates are highly skewed. Ignoring them risks losing disproportionate revenue.
Question 24Marketing principles and customer behaviour
A firm claims its product is the most durable on the market, but research shows buyers care mainly about ease of use. What is the main weakness of this positioning?
- The claim is not distinctive from competitors
- The claim is too expensive to advertise
- The claim rests on an attribute that is not valued by the target customers Correct answer.
- The claim lacks legal approval
Explanation
Effective positioning requires a distinctive advantage that matters to the chosen target segment. A durability claim fails if buyers prioritise ease of use, because the attribute does not drive their choice. Distinctiveness alone cannot compensate for irrelevance to customer needs.
Question 25Marketing principles and customer behaviour
A company uses an undifferentiated strategy for a market that is becoming increasingly fragmented. Why is this approach likely to fail?
- It forces prices to be set below cost
- It ignores differences in needs and leaves openings for specialist competitors Correct answer.
- It cannot use any promotional tools
- It requires too much market research to implement
Explanation
Undifferentiated marketing assumes buyers share similar needs, which becomes untenable as a market fragments. Specialist competitors can serve distinct segments better and erode the mass offer. The approach actually relies on limited research rather than excessive research.
Question 26Marketing principles and customer behaviour
Which element of the marketing mix concerns the channels and locations through which a product reaches its buyers?
- Price
- Place Correct answer.
- Promotion
- Product
Explanation
Place covers distribution decisions, including the intermediaries, outlets and logistics used to make a product available where buyers expect it. Price concerns the amount charged, product concerns the offer itself, and promotion concerns communication. Distribution therefore determines availability and convenience for the customer.
Question 27Marketing principles and customer behaviour
Which term describes the process by which a buyer compares the value received from a purchase with the cost incurred?
- Customer satisfaction
- Perceived value Correct answer.
- Cognitive dissonance
- Selective distortion
Explanation
Perceived value is the customer's judgement of the benefits received relative to the sacrifices made, such as money, time and effort. It is subjective and drives whether a purchase is seen as worthwhile. Satisfaction, by contrast, compares expectations with performance after use.
Question 28Marketing principles and customer behaviour
Which environmental force includes changes in birth rates, household size and population age structure?
- Demographic environment Correct answer.
- Natural environment
- Technological environment
- Political environment
Explanation
The demographic environment consists of measurable characteristics of populations, such as size, density, age structure and household composition. Marketers monitor it because shifts in these characteristics change the size and nature of demand. Technological, political and natural forces are separate elements of the macroenvironment.
Question 29Marketing principles and customer behaviour
In the marketing research process, what is the main purpose of defining the research problem?
- To select the cheapest available method of collecting data
- To write the final report before fieldwork begins
- To set a clear focus that determines what information must be collected Correct answer.
- To decide the selling price of the finished product
Explanation
A well-defined problem states precisely what decision the research must support and which information gaps need closing. It guides the choice of objectives, methods and sample so that data collected are relevant. Without this focus, research can generate large volumes of information that do not address the manager's decision.
Question 30Marketing principles and customer behaviour
Which statement best describes a market segment?
- A channel intermediary that resells goods to retailers
- A single customer selected for in-depth interviews
- A group of buyers with shared characteristics or needs that respond similarly to a marketing offer Correct answer.
- The total set of all possible buyers for a product category
Explanation
A segment is a subgroup of a market whose members share needs, behaviour or characteristics that make them respond in similar ways to marketing activity. Segmentation groups buyers so that offers can be tailored efficiently. A target market is the segment or segments a firm chooses to serve.
Question 31Marketing principles and customer behaviour
A customer buys a newspaper each morning from the same shop without comparing alternatives. Which type of buying behaviour does this illustrate?
- Extensive problem solving
- Impulse buying
- Variety-seeking behaviour
- Habitual buying behaviour Correct answer.
Explanation
Habitual buying behaviour occurs in low-involvement purchases with few perceived differences between brands, so the buyer repeats a familiar choice with minimal search. The routine nature of the purchase and the absence of comparison are the defining signals. Impulse buying, by contrast, is unplanned and triggered at the point of sale.
Question 32Marketing principles and customer behaviour
Which component of an attitude concerns a person's intention or tendency to act towards an object?
- Cognitive component
- Affective component
- Conative component Correct answer.
- Perceptual component
Explanation
Attitudes are commonly modelled as having cognitive, affective and conative components. The conative component, also called behavioural, captures the tendency or intention to act, such as intending to buy a brand. Beliefs form the cognitive part and feelings form the affective part.
Question 33Marketing principles and customer behaviour
A company states that it aims to be the most trusted provider of home insurance for families with young children. Which marketing activity does this statement represent?
- Product diversification
- Market targeting Correct answer.
- Vertical integration
- Market penetration pricing
Explanation
Targeting is the decision about which segment or segments the firm will serve and orient its offer towards. Naming families with young children identifies the chosen group and the basis on which the firm intends to compete. Penetration pricing, diversification and integration are separate strategic choices.
Question 34Marketing principles and customer behaviour
A cosmetics brand sells a low-priced lip balm alongside premium serums and uses distinct names, packaging and prices for each line. Which approach to product mix is it applying?
- Product line stretching downward
- Product line pruning
- Product line filling Correct answer.
- Brand extension
Explanation
Line filling means adding items within the existing price and quality range to cover gaps, use spare capacity or block competitors. The balm sits at the low end of the existing range without moving the brand into a new tier. Downward stretching would involve adding a lower tier than the current range, and pruning would mean deleting items.
Question 35Marketing principles and customer behaviour
A firm charges a high launch price for a new smartwatch and lowers it over time as competitors enter. Which pricing strategy is this?
- Price skimming Correct answer.
- Psychological pricing
- Penetration pricing
- Loss-leader pricing
Explanation
Price skimming sets a high initial price to capture buyers with low price sensitivity and recover development costs quickly, then reduces the price to reach wider groups. It suits innovative products with early adopters and limited initial competition. Penetration pricing does the opposite by starting low to build volume.
Question 36Marketing principles and customer behaviour
A manufacturer opens its own branded stores in addition to selling through independent retailers. Which distribution development does this describe?
- Forward vertical integration Correct answer.
- Disintermediation of retailing
- Horizontal integration
- Exclusive distribution
Explanation
Forward vertical integration occurs when a manufacturer takes ownership of a downstream stage, here retailing, by operating its own outlets. It gives greater control over the customer experience and access to sales data. Exclusive distribution concerns the number of outlets in an area, not ownership.
Question 37Marketing principles and customer behaviour
Which factor in the buyer decision process is illustrated when a purchaser is influenced by colleagues' approval of a brand?
- Situational factors
- Personal factors
- Social factors Correct answer.
- Economic factors
Explanation
Social factors include reference groups, family, roles and status, all of which shape what a buyer considers acceptable. Approval from colleagues reflects the influence of a reference group. Personal factors such as age and lifestyle, and situational factors such as time pressure, operate differently.
Question 38Marketing principles and customer behaviour
A restaurant identifies that lunchtime office workers value speed above variety, while evening diners value atmosphere and choice. How should it use this insight?
- Abandon the lunchtime trade to focus only on evening diners
- Offer identical menus and service to both groups to keep costs low
- Raise prices for both groups to signal quality
- Develop differentiated offers and communication for each segment Correct answer.
Explanation
When segments have different priorities, differentiated offers and messages allow the firm to meet each group's needs and improve value for both. Treating them identically would force compromises that satisfy neither group well. Dropping a segment or blanket price rises are decisions that need separate justification.
Question 39Marketing principles and customer behaviour
Which of the following best describes a derived demand in business markets?
- Demand that arises from the demand for consumer goods that the business input helps produce Correct answer.
- Demand that fluctuates randomly between periods
- Demand that is unaffected by changes in price
- Demand that comes only from government buyers
Explanation
Derived demand means that business demand ultimately depends on demand for the consumer products made using the purchased inputs. If consumer sales of the finished good fall, orders for components and materials fall too. This link makes business markets sensitive to shifts in final consumer demand.
Question 40Marketing principles and customer behaviour
A brand uses a well-known athlete in advertisements to transfer favourable associations to its products. Which concept explains this effect?
- Classical conditioning through association Correct answer.
- Subliminal perception
- Operant conditioning through reinforcement
- Selective retention
Explanation
Associating a brand repeatedly with a liked or admired stimulus, such as an athlete, can transfer positive feelings to the brand through classical conditioning. The pairing, not the buyer's own rewarded behaviour, produces the effect. Operant conditioning instead depends on reinforcement following the consumer's actions.
Question 41Marketing principles and customer behaviour
A firm plots its brand and competitors on two dimensions that customers use to compare products. Which tool is being used?
- Perceptual mapping Correct answer.
- Gap analysis of service quality
- Product life cycle analysis
- Ansoff matrix
Explanation
Perceptual mapping positions brands in a two-dimensional space defined by attributes customers consider important, revealing how they view competing offers. It helps identify unoccupied positions and crowded areas. The Ansoff matrix and life cycle analysis address growth strategy and product stages, not buyer perceptions.
Question 42Marketing principles and customer behaviour
A firm's sales data show that a small group of customers accounts for a large share of revenue. Which action is most consistent with this finding?
- Prioritise retention and tailored service for high-value customers Correct answer.
- Reduce service levels for all customers to cut costs
- Treat every customer identically to avoid unfairness
- Increase advertising equally across all groups
Explanation
When revenue is concentrated, retaining the customers who generate most value usually offers the greatest return, so tailored service and retention effort are justified. This is the practical implication of the concentration principle in customer analysis. Uniform treatment or blanket cuts ignore the uneven distribution of value.
Question 43Marketing principles and customer behaviour
Which of the following is the best example of a marketing information system in use?
- A manager reviews monthly sales, complaint and website data from internal records and market reports before setting a promotion budget Correct answer.
- A salesperson negotiates a discount with a single customer
- A researcher conducts one focus group for a new product concept
- A firm hires an agency to design a new logo
Explanation
A marketing information system brings together internal records, marketing intelligence and research so that managers can make informed decisions regularly. The routine use of combined data sources for a planning decision matches this definition. A single focus group is one research method, not a system.
Question 44Marketing principles and customer behaviour
A firm introduces a new product that requires buyers to change their established habits and learn new routines. Which adoption factor does this illustrate?
- Observability
- Compatibility Correct answer.
- Complexity
- Trialability
Explanation
Compatibility refers to how far an innovation fits existing values, habits and practices. A product that demands new routines is low in compatibility and tends to be adopted more slowly. Complexity concerns how difficult the innovation is to understand or use, which is a related but distinct attribute.
Question 45Marketing principles and customer behaviour
A brand claims its product is the most durable available, but research shows buyers mainly value ease of use. Which weakness in the marketing approach does this reveal?
- The positioning is built on an attribute buyers do not prioritise Correct answer.
- The price is set below the level needed for profit
- The distribution channel is too narrow
- The segment is too small to be profitable
Explanation
Effective positioning rests on a benefit that the target segment considers important and on which the brand can credibly claim superiority. Emphasising durability when buyers care about ease of use creates a mismatch between the message and the customer's priorities. The other issues concern size, price and coverage rather than message relevance.
Question 46Marketing principles and customer behaviour
Why does reference group influence tend to be strongest for products that are visible to others?
- Conspicuous use allows others to judge and reward or sanction the choice Correct answer.
- Visible products require no information search
- Reference groups only affect essential goods
- Visible products are always cheaper to buy
Explanation
When a product is seen and used publicly, other people can observe the choice and respond with approval or disapproval, so group norms become salient. For privately consumed goods, group pressure is weaker because the choice is not displayed. This explains why visible, conspicuous categories are more susceptible to social influence.
Question 47Marketing principles and customer behaviour
A firm uses a differentiated strategy across several segments and finds its costs rising faster than its revenues. Which explanation is most plausible?
- Tailoring offers to several segments raises design, production and marketing costs Correct answer.
- Differentiated strategies cannot use advertising
- Serving several segments removes all competition
- Segmentation always reduces total revenue
Explanation
Differentiation across segments brings extra costs from separate product variants, smaller production runs and distinct campaigns, and these can outrun the additional revenue if segments are too small or too similar. The strategy is viable when the extra value justifies the extra cost. It does not inherently reduce revenue or eliminate competition.
Question 48Marketing principles and customer behaviour
A firm's product has entered the maturity stage of its life cycle. Which combination of actions is most appropriate?
- Withdraw the product immediately and reallocate all resources
- Defend market share, differentiate the offer and manage costs to protect margin Correct answer.
- Increase capacity rapidly to meet fast-growing demand
- Cut prices sharply and ignore competitor moves
Explanation
In maturity, sales growth slows and competition intensifies, so profits are protected by defending share, differentiating and controlling costs. Rapid capacity expansion suits growth, while immediate withdrawal forgoes remaining cash flow. The aim is to extend the profitable phase rather than abandon it.
Question 49Marketing principles and customer behaviour
A company uses an undifferentiated strategy in a market that is fragmenting into distinct need groups. Why is this likely to be a weakness?
- A single offer struggles to satisfy diverging needs, leaving openings for focused rivals Correct answer.
- It requires more product variants than a differentiated strategy
- It prevents the firm from advertising at all
- It forces the firm to charge the highest price in the market
Explanation
An undifferentiated strategy assumes buyers have broadly similar needs and offers one proposition to all. As needs diverge, that proposition fits fewer customers well, and competitors targeting specific groups can win them away. The weakness is fit, not an inability to advertise or a required price level.
Question 50Marketing principles and customer behaviour
A consumer moves from problem recognition to an evoked set of three brands after searching only a few sources. Which interpretation of this behaviour is most sound?
- The buyer has limited the alternatives considered, so only brands in the evoked set are likely to be chosen Correct answer.
- The buyer has already made a purchase decision
- The buyer has completed an extensive search of all available brands
- The buyer is unaffected by prior experience or advertising
Explanation
The evoked set is the small group of brands a buyer actively considers from those available and remembered. Only alternatives within this set have a realistic chance of being chosen, so marketers aim to enter it. A limited search does not mean the decision is complete or that prior learning played no part.